Illinois Appellate Court Find That Health-Care Power of Attorney Authorizes the Agent to Sign Nursing Home’s Arbitration Provision and Thus Patient Can Be Bound by the Agent’s Action

In a nursing home dispute, the Illinois Appellate Court weighed in on an issue of whether a health-care power of attorney holder could bind the nursing home resident to an arbitration provision in order to gain admission to the long-term care facility. In this case, Edward M. Fiala Jr. sued Bickford Senior Living Group in Kane County, Ill. Bickford moved to compel arbitration based on an agreement, called “the establishment contract” that his daughter, Susan Kahanic, signed as attorney-in-fact under a health-care power of attorney.

Kahanic’s signature on the establishment contract was required in order to get Fiala admitted to Bickford Senior Living Group’s facility.

It was argued that the health-care power of attorney did not authorize Kahanic to consent to the arbitration provision in the establishment contract. The trial court agreed and denied Bickford’s motion.

The Illinois Appellate Court reversed stating that “the unambiguous language of the Power of Attorney Law encompasses a decision to admit the principal to an assisted living facility such as defendant’s.” And although “ the general rule limits the scope of a health-care power of attorney to matters involving the principal’s healthcare and that the agent is given no authority over the principal’s property or financial matters.”

The court looked at some other states’ case law on this issue where it had been held that health-care decisions that encompassed collateral issues, such as the acceptance of an arbitration clause, may be considered to be legitimate health-care decisions under the authority granted by the health-care power of attorney. But where the arbitration provision is optional and not mandatory on admission to a long-care facility, the agent holding the health-care power of attorney is not authorized to sign the arbitration provision and the patient cannot be bound by the agent’s action.

The appeals panel held that the Power of Attorney Law provides that the authority of an agent under a health-care power-of-attorney agreement encompasses any type of health-care decision. The court held that the unambiguous language of the Power of Attorney Law encompasses a decision to admit the principal to an assisted-living facility such as defendant’s. Under Section 4-10(c) of the short-form power of attorney for health-care it authorizes the agent to “make any and all health-care decisions on behalf of the principal” and importantly, to “sign and deliver all instruments, negotiate and enter into all agreements and to do all other acts reasonably necessary to implement the exercise of the powers granted” by the health-care power of attorney.

The plaintiff argued that the Power of Attorney Law limits the agent’s powers “to health-care decisions, to contract for the health-care services and facilities and to bind the principal to pay for all such services and facilities.” Plaintiff here argued that Kahanic “did not have authority to agree to arbitrary claims unrelated to payment for health-care services and facilities.” The appeals panel disagreed.

The court determined that the decision whether to admit a patient to a nursing home was a health-care decision. The court held that “an attorney-in-fact acting pursuant to a durable power of attorney for health-care may sign a nursing-home contract that contains an arbitration provision because this action is necessary to ‘consent to health-care’.” In other states, the courts have also held that, where the arbitration provision is optional or otherwise not necessary to gain admission to a long-term care facility, the agent acting pursuant to a health-care power of attorney is not authorized to sign the arbitration provision and the patient cannot be bound by the agent’s action. Life Care Centers of America v. Smith, 298 Ga. App. 739, 681 S.E. 2d 182 (2010); Koricic v. Beverly Enterprises-Nebraska Inc., 278 Neb. 713, 773 N.W. 2d 145 (Neb. 2009).

The law in other states and perhaps in Illinois as well, is that if an arbitration provision is required for admission to a care facility, then it becomes part and parcel of the health-care decision to admit the patient to the facility. In this case, consent to the arbitration provision was an integral part of plaintiff’s admission to defendant’s facility. The arbitration provision was neither optional nor freestanding.

This appellate court noted that in three other out-state decisions, they all supported the result reached in this case. That is the plaintiff’s power of attorney authorized Kahanic to bind her father to the arbitration provision because it was part of the establishment clause that gained plaintiff admission into defendant’s facility. The Illinois Appellate Court concluded that the trial court was wrong in holding that the health-care power of attorney did not grant Kahanic the authority to execute the arbitration provision.

We serve the following localities: Cook County including Arlington Heights, Barrington, Berwyn Township, Chicago, Des Plaines, Glenview, Orland Park, Palos Park, Schaumburg, and Tinley Park; DuPage County including Downers Grove, Naperville, and Bolingbrook; Kane County including Aurora, Elgin and Geneva; Lake County including Waukegan; and Will County including Joliet.